Small businesses need all their resources to remain competitive, reach their target customers, improve their products and services, and sustain profitability. One of the ways to achieve these goals is to keep accounting costs low. Reducing expenses in that aspect of your small business allows you to save more money. The additional savings lower accounting costs create enables you to direct more resources to profitable endeavors. You can divert cash to the training of your employees or hiring new ones, develop new products and services, expand your customer base, open a new branch in a different city, or move into a new office.
How do you reduce accounting costs?
Invest in Software
Manage your small business’ money better and reduce accounting costs by investing in software. Technology has revolutionized the business landscape and has simplified time consuming tasks such as bookkeeping and has improved the security of storing data. Xero and QuickBooks Online are accounting software you should consider using. Both provide a multitude of benefits for small business owners. Either system has features that allow you to generate financial reports which you can use to make decisions. Access the financial data you stored in the cloud at your convenience, regardless of your location and time. This makes it easier for your team to update their reports using the latest financial data of your small business. It also syncs all your financial data, which makes it a one-stop destination whenever you need to browse your records. Software enables you to send invoices and reminders to customers that payment is due soon. This feature allows you to maintain good cash flow and collect receivables in a timely manner.
Accounting software provides you with accurate data. The precise and organized financial data software generates enables you to monitor your small business’ transactions. Pinpoint where your cash is going throughout your company’s operations. This allows you to identify where you can cut costs and save more money. The security of accounting software is top-notch. Designate specific employees who can access your financial data. The encryption and security protocols of such systems prevent data theft. Small business owners also don’t have to worry about misplacing their data or losing it because of natural disasters. Other benefits of using software include reducing inventory mistakes, streamlines filing of taxes, and simplifies payroll.
Software such as Xero and QuickBooks Online is user-friendly even for beginners. It doesn’t take much time to learn the features and adapt to the interface. An outsourced bookkeeping company that offers affordable bookkeeping services can teach you how to use the system and set it up for you. You don’t have to do bookkeeping if you can outsource it. Service providers have the experience that your team may lack. They can provide you with updated accounting books while you focus your efforts and resources on your small business’ goals.
Consider Outsourced Bookkeeping
Hiring new employees or training current ones to do bookkeeping can be costly. New employees need onboarding, training, and need to adjust to your small business’ culture. Current employees need to learn how to do bookkeeping properly to avoid making mistakes. Errors in your accounting books can lead to poor financial decisions about operations and marketing. It can also lead to tax problems and penalties that incur more costs. Employees that lack the skills and experience in bookkeeping will be unable to focus on their other tasks and will be less productive.
Your small business can benefit from outsourced bookkeeping. You can find affordable bookkeeping services that are within your budget without sacrificing quality. Outsourced bookkeepers have the experience and are meticulous with details. They can easily detect errors in your books and correct them. They can also do bank reconciliation, update financial statements, categorize employees and other bookkeeping tasks you need them to do. You will spend less on them because you can hire an outsourced bookkeeper by the hours they work or per project. Customize the service you get and only pay for what you need.
The additional savings generated by getting affordable bookkeeping services allows you to invest in the growth of your small business and the training of your employees. You will have more resources to plan on opening a new branch or launch a product that you have been developing.
Implement the 5s of Lean Production
The 5s of lean production is mostly associated with operations in the service and manufacturing industries. However, its concepts are universal and can also help you reduce accounting costs. This workflow consists of the following:
- Standardize – Establish and follow a standard that your employees follow. These accountants can be in-house or outsourced. If you’re outsourcing, make your rules clear to your partners. Streamline and simplify processes to eliminate mistakes.
- Sort – Separate the important and unnecessary things in your office to keep employees focused on their tasks. Clutter is a distraction that reduces productivity. Categorize the financial documents you store online or in your shelves. This makes it easier to access them whenever you need to monitor your small business’ expenses and cash flow.
- Set in Order – Organization boosts the efficiency and productivity of employees or the outsourced partners you hire. Organize the financial documents you need to give to your outsourced bookkeepers or employees designated to do the bookkeeping. It will be easier to organize records if you invest in accounting software. Doing so allows you to store all the documents you need in the cloud. You can update in real-time and access the information you need at your convenience.
- Shine – A clean workspace may seem like a little detail, but it does its part in boosting morale and creating a professional work environment.
- Sustain – It’s important that you sustain all the other Ss on this list. Implement these best practices because doing so reduces miscommunication, improves productivity, and creates a professional environment at work.
These are some of the things you can do to reduce your small business’ accounting costs. The savings these generate improve cash flow, allow you to re-invest in your company, train your employees, hire new ones, and develop new products or services.
If you’re looking for affordable bookkeeping services, Robookkeeper is your go-to company. We offer first-rate bookkeeping services for small business owners. Our team of freelance bookkeepers get the job done without compromising quality.